Tumbling stocks, recession fears, and a retail surge: Markets news roundup
April 19, 2025
As markets swing wildly on tariff headlines and economic uncertainty, a curious split is emerging: Retail investors are diving in, while institutional players are stepping back. Even as big banks report blowout trading revenue, the underlying behavior suggests churn — not conviction.
Ray Dalio, the billionaire hedge fund manager of Bridgewater Associates, said over the weekend that he’s worried about “something worse than a recession” because of President Donald Trump’s trade war.
A top Federal Reserve official said Monday that the impact of President Donald Trump’s trade war on prices would be “transitory,” echoing a term that central bankers and Biden administration officials used often as inflation soared in the aftermath of the pandemic.
Fears of a recession are looming larger among some of the country’s top businesspeople. In fact, according to a recent survey, more than 60% of CEOs expect a U.S. recession in the impending future — as the country deals with trade wars, tariff fallout, wild swings in the global markets, and more.
Federal Reserve Chair Jerome Powell said Wednesday that he expects President Donald Trump’s tariffs to lead to further inflation.
Powell made the comments during an event hosted by the Economic Club of Chicago, where he spoke about the state of the U.S. economy.
“Tariffs are highly likely to generate at least a temporary rise in inflation,” he said. “The inflationary effects could also be more persistent. Avoiding that outcome will depend on the size of the effects, on how long it takes for them to pass through fully to prices, and, ultimately, on keeping longer-term inflation expectations well-anchored.”
Buyer beware? Retail sales last month surged to their highest levels in two years as shoppers went on a spending spree to try to beat the clock on President Donald Trump’s tariffs. But the numbers suggest worry about the future of the U.S. economy, not positivity.
American consumers are growing increasingly worried about the economy, according to a Fed survey released Monday.
Sentiments around unemployment, job loss, and earnings growth all declined month-over-month, data from the central bank’s March 2025 Survey of Customer Expectations shows. Expectations around the stock market reached the lowest level since June 2022.
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